Saudi Arabia defends oil production cuts after US backlash
The Saudi Arabian government said on Thursday that the Opec+decision to slash oil supply was taken unanimously by the cartel and was not influenced by the kingdom’s stance on Russia’s invasion of Ukraine, following a backlash from the US.
In an extraordinarily detailed and unusual defence of the Opec+ cuts, the Saudi foreign ministry also appeared to suggest that the Biden administration had asked the kingdom to delay a plan to cut oil production by a month.
A delay would have reduced the impact of any increase in crude prices until after the US midterm elections, as President Joe Biden and Democratic lawmakers have defended the party against attacks from Republicans over high inflation and petrol prices.
The Saudi government’s intervention suggested Riyadh had been stung by Washington’s backlash to the supply cuts, with Biden warning of “consequences” for the kingdom and senior Democrats calling to end arms shipments to the Gulf ally.
The Saudi foreign ministry expressed a “total rejection” of statements that “described the decision as the kingdom taking sides in international conflicts and that it was politically motivated against the United States of America”.
After the oil producer group’s decision last week to slash 2mn barrels a day from its output quotas, the US said Opec+ had “aligned with Russia”, Riyadh’s ally in the cartel.
The statement from Saudi Arabia also countered claims that other Opec+ members had opposed the cartel’s supply cut.
The United Arab Emirates, Iraq and Bahrain were among the Opec+ members that were uncomfortable with the reductions, according to people familiar with the discussions, although none made their dissent public.
The Emirati and Iraqi oil ministers publicly endorsed the decision following the meeting last week in Vienna.
“The decision was taken unanimously by all member states of the Opec+ group,” the Saudi foreign ministry said.
“The kingdom affirms that the outcomes of the Opec+ meetings are adopted through consensus among member states, and that they are not based on the unilateral decision by a single country.”
Following last week’s meeting, oil analysts expressed surprise at the magnitude of the planned cuts while oil prices remained above $90 a barrel, almost twice the long-term average price, and just a month ahead of the US midterms.
The Saudi statement said that Opec+ decisions were based “purely on economic considerations”.
The White House and the state department did not return requests for comment on the Saudi statement. On Wednesday, US officials stressed that Biden was serious about re-evaluating the bilateral relationship with Saudi Arabia and would launch talks with members of Congress about countermeasures.
“There’s going to be consultation with our allies. There’s going to be consultation with Congress. And decisions will be made in a deliberate way,” said Karine Jean-Pierre, White House press secretary.
Ned Price, state department spokesperson, added: “Our goal is to see to it that our relationship with Saudi Arabia is calibrated and recalibrated in such a way that it is most effectively serving our interests. This is a relationship that, over the course of years, has not always effectively served our interests.”
Price said he could not confirm the US had asked for a one-month delay in the production cuts during talks with Saudi officials. “What I can confirm is that we conveyed a consistent message to the Saudis: energy supply needs to meet energy demand.”